For over 2 decades now, PayPal has been one of the most popular methods of making online payments and managing your funds via the internet. It is very useful and convenient to use, which is why it is highly preferred by citizens around the world despite some of its flaws. More recently, the platform has now announced that you can buy cryptocurrencies through it too.
If you wish to learn how to buy Bitcoin with PayPal, keep reading and this guide will explain all you need to know about it.
In This Guide
Buying Bitcoin with PayPal is best done via the eToro broker service, as eToro is one of the rare few services that actually managed to ink a deal with PayPal and get the payments giant to support it. If you only wish for a quick guide on how to get started on eToro, here is what you need to know.
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68% of retail investor accounts lose money when trading CFDs with this provider.
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There are several platforms that you could use in order to buy Bitcoins through PayPal in the UK, and then top such platforms have been reviewed below in detail.
If you are looking for a trading platform in the UK that lets you buy Bitcoins through PayPal, then eToro is easily the best option. Firstly, in addition to PayPal, the platform supports a variety of other payment methods, such as other electronic wallets like Neteller and Skrill in addition to the traditional methods of credit/debit cards and bank transfers. The onboarding and deposit process is also quite straightforward and smooth, with opening an account on eToro taking only a few minutes.
The platform also allows you to buy a variety of other assets through PayPal, such as stocks, indices, ETFs, and commodities. As far as cryptocurrencies are concerned too, you can buy other cryptos such as Ethereum, Cardano, Ripple through eToro too.
eToro is also quite popular among traders because of the fact that it is a very regulated platform. It is licensed by top-tier regulatory agencies worldwide, such as the FCA, the ASIC, and the CySEC. This means that every penny that you choose to invest in the platform is safe and there is no risk of you losing it. Especially in the world of crypto, wherein most platforms are not regulated and there are several frauds all the time, a regulated crypto platform is very rare. In addition to this, eToro also allows you to trade on cryptocurrency options for certain major cryptos.
The eToro fee structure is also different from most other crypto trading platforms because it does not charge any commissions. On the other hand, if you trade through eToro, the only fee that you pay is the spread, which is the difference between the bid and ask prices. The lack of commissions and low spreads make eToro a very attractive trading option for regular traders. In addition to this, you can also make use of various copy trading tools that eToro offers. Through this, you can select a trader that you think is profitable, and copy all their trades. This will allow you to take advantage of the expertise of other experienced traders and profit from movements. Alongside adding funds via PayPal, you can get started with an eToro trading account in minutes – and deposit methods include debit/credit cards, bank transfers, and e-wallets like Skrill.
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
One of the most popular cryptocurrency brokers for traders around the world, Paxful stands out in a number of ways from its competition, one of these ways being that it supports over 300 payment methods. Since the platform caters to traders in a very wide geographical variety, it stands to reason that it has to support different platforms that people in these countries use. PayPal is one such payment method that Paxful supports, and it has made Paxful a very popular trading choice for investors in the UK who wish to buy Bitcoin with PayPal.
Apart from a very high level of variety in their payment methods, there are several other factors that set Paxful apart. It is one of the largest cryptocurrency exchanges in the world, and even though it is not regulated by regulatory agencies, it does self-regulate and requires all users to complete the KYC process before they can begin trading through it. They offer a large and diverse product offering that ranges from Bitcoin to other altcoins such as Cardano, Ethereum, and Bitcoin Cash.
In addition to this, the platform offers the ability to add biometric verification to your account for added security. They have fixed trading fees, and instead of following the traditional order-book principle, they allow you to match directly with buyers and sellers to make the process of trading very simple. The only major drawback is that the platform is not regulated and that their exchange rates tend to be a tad higher than the industry average. However, this is more than made up for by the fact that they have fixed and low trading fees, and offer the possibility of safe escrow trading too.
LocalBitcoins is a unique platform in several ways, each of which has enabled it to stand out from its competitors and become a part of the very small group of platforms that allow traders to buy Bitcoins through PayPal. It is a peer-to-peer online marketplace, which means it functions in a very similar way to eBay or Craigslist. For example, you can simply create an account on the platform and begin to search for traders near you looking to buy or sell Bitcoins.
Alternatively, you could create an advertisement yourself if you are looking to buy or sell Bitcoins, and this is free until the transaction actually goes through. LocalBitcoins also stands out due to the fact that it supports hundreds of different payment methods. PayPal is one such payment method that LocalBitcoins supports, and it has made the platform a very popular trading choice for investors in the UK who wish to buy Bitcoin with PayPal.
It is one of the oldest Bitcoin exchanges in the world and allows you to convert Bitcoins into a variety of fiat currencies. The exchange also boats a high level of liquidity and a clientele that is present in almost every country in the world. However, some of the drawbacks of the platform include its limited product variety and the fact that any trading that you carry out through the platform is not anonymous. They have fixed trading fees, and instead of following the traditional order-book principle, they allow you to match directly with buyers and sellers to make the process of trading very simple.
There are several reasons why people prefer buying Bitcoins and other cryptocurrencies through PayPal, and these are the same reasons that have positioned it at the forefront of the payments industry. They provide a viable and feasible alternative to buying cryptocurrencies through debit and credit cards, and this is true for a variety of reasons. These reasons have been discussed below in detail.
The first benefit that springs to mind when you use PayPal instead of a traditional wire transfer or your credit/debit card in order to purchase cryptocurrencies is security. There have been numerous incidents and scams in the past where users have tried to deposit their funds onto a platform, and have found their account information getting leaked to a third party, which has resulted in huge financial losses. While these data breaches are rare and usually only affect unregulated platforms, it is a very real possibility, and therefore you might be better off using a method of payment wherein this is not a possibility. PayPal offers this functionality because when you make a transaction through PayPal, you only mention your account email ID on the transaction. Your credit/debit card and bank account are linked to your PayPal account instead of being used on the platform directly, which provides you with an additional layer of protection from anyone who might be looking to steal your information. Therefore, the only point where your bank details are stored is during the creation of your PayPal account.
Therefore, when you buy Bitcoin with Paypal, you won’t need to enter your debit or credit card numbers into the website of your chosen cryptocurrency trading platform. On the contrary, you should have already linked a payment method to your Paypal account. This means that once you specify how much you would like to deposit, all you need to do is enter your Paypal login credentials. Then, it’s just a case of selecting your preferred funding method or better – using the funds that you already have in your Paypal account. We should also note that the e-wallet provider utilizes data encryption technologies, so your chosen Bitcoin exchange will never have access to your Paypal logging credentials. This creates an additional layer of security and ensures that your funds are protected.
As an additional benefit, Paypal offers something called Buyer Protection. As the name suggests, this means that you are protected from unauthorized purchases, as well as fraud. This operates like the chargebacks system offered by debit/credit card providers. Therefore, in the worst case, even if there is a data breach and someone gets access to your account credentials, any funds that they withdraw or use will be reimbursed to you as soon as you report it as a false transaction.
In a market as volatile as cryptocurrencies, timing matters quite a bit. For example, Bitcoin could be down to $40,000 today and it might be a great opportunity for you to buy the dip, but if you choose to do so via a bank transfer, it will take up to 3 days for the funds to show up in your account. By then, the price could cross $55,000 resulting in your missing out on approximately $15,000 worth of gains on every Bitcoin you did not buy. Buying Bitcoins through PayPal fixes this since it allows you to instantaneously add funds to your account and use them to buy cryptocurrencies
When using a regulated broker, you can buy Bitcoin with PayPal instantly. This is because you will either be using your Paypal balance or funding the deposit with a debit/credit card. Interestingly, when you fund a Paypal transaction with a linked bank account, you will sometimes benefit from an instant transfer. This is at the discretion of Paypal and is usually based on how long you have been a customer.
When you choose to deposit funds into your account through traditional means such as the use of a wire transfer or a credit/debit card, there are a variety of fees associated with it. These fees can be split into three main categories. The first category of fees that you might have to pay is a flat deposit fee that your trading platform might charge. This is quite a rare occurrence, as platforms such as eToro tend to avoid deposit charges. This is because a deposit charge discourages people from adding funds to their accounts regularly, which is the opposite of what eToro and other trading platforms want
The second type of fee that you might pay is the currency conversion fee, which is primarily done if you wish to add funds from your UK bank account to a broker that does not offer GBP as a base currency. In this case, you will end up paying up to 2-3% of the total transaction amount in currency conversion fees. This is not something that most investors wish to do, especially if you are going to regularly deposit and withdraw funds from your account. Hence, PayPal provides a useful and viable alternative to this. By enabling you to hold balances in multiple currencies through your account, PayPal allows users to circumvent the currency conversion fees and instead add funds directly to their accounts in whatever currency they wish
The third type of fee is the payment provider fee, which is usually incurred when you choose to add funds to your account via a credit/debit card. In this case, while using a broker like Binance, you will end up paying a significant part of your deposit as fees to the payment providers. This can be avoided through PayPal too. When you make an online purchase with your Paypal account, the digital wallet provider will not charge you any fees. Although this is usually the case with debit cards and bank account transfers anyway, avoiding unnecessary fees is crucial when buying Bitcoin.
Paypal is also a great option as it offers lots in the way of convenience. Using PayPal to deposit funds into your account does not require you to remember your debit card details or carry it around with you at all times, as you can just simply link it to your PayPal account and use it wherever you want. When dealing with a cryptocurrency as volatile as BTC, where 10% daily jumps are not unusual, this becomes even more important, as it is crucial for you to be able to add funds from wherever you may be, whether or not you have your debit card with you. PayPal allows you to do that with the highest levels of convenience
For example, if you wish to buy Bitcoin right now, but you’re outside and have forgotten your wallet at home. Instead of not being able to add money and having to wait until you get home, you can simply open your PayPal account and use that to add funds to your cryptocurrency wallet and buy Bitcoin. As a result, as long as you know your Paypal login credentials, you can still purchase Bitcoin. This is because you will not be asked to enter your debit/credit card numbers – as long as the respective card is linked to your Paypal account.
Perhaps one of the best benefits of using Paypal to buy Bitcoin is that the end-to-end withdrawal process is super-fast. Firstly, this is because online brokers typically process e-wallet withdrawals much faster than debit/credit cards and bank accounts. This is because Paypal is less bureaucratic, meaning fewer checks need to be made. This is because you will have already completed the PayPal ID verification when you first signed up
Your chosen Bitcoin broker will be able to see this, meaning they often process Paypal withdrawal requests on a same-day basis. Additionally, once the broker in question has processed the withdrawal, this is where Paypal really shines. This is because from the moment the money is transferred, it should appear in your Paypal account in less than a minute. Debit/credit cards, on the other hand, usually take 2-3 working days. Bank account withdrawals are even slower. Depending on who you bank with, this can take anywhere from 3-7 working days. Once the money does hit your Paypal account, you can then withdraw the funds to your bank account at the click of a button. In all but a few rare cases, this should hit your UK bank account instantly.
It is important to note that every platform cannot accept deposits via PayPal to purchase Bitcoins and other cryptocurrencies. This is because cryptocurrency brokerage sites must have the legal remit to accept fiat currency payments. Not only does this include traditional debit/credit cards and bank account transfers – but it also includes e-wallets like Paypal. In other words, you couldn’t create a website and allow people to buy Bitcoin with Paypal. On the contrary, this luxury is reserved for heavily regulated entities
For example, one of the most popular trading platforms in the world, eToro, is licensed by the FCA, ASIC, as well as the CySEC, among others. The platform is also registered with US watchdog FINRA. This is why all regulated brokers selling Bitcoin and accepting Paypal ask you to upload copies of your government-issued ID. Without it, you won’t be able to buy Bitcoin with Paypal – or any traditional payment method for that matter. This is important, as it adds to the security of the platform and ensures that you are exactly who you say you are. This also helps to ensure that your identity is verified, and therefore your funds are secure. For platforms like eToro, which are heavily regulated worldwide, you cannot actually begin buying and selling on the platform until you have completed the verification process. Crucially, Paypal operates within the law when it comes to the countering of money laundering. As such, any unregulated platforms that attempt to use their e-wallet services without the legal remit to do so will have their Paypal account shut down and all funds frozen
In order to assist you with trading BTC, here is a list of steps that you need to follow in order to begin trading altcoins on eToro. The process of opening an account and trading on eToro is quite straightforward and involves 4 main steps.
The first thing that you need to do is to navigate to the eToro homepage and click on “Join Today”. Then, you will be asked to fill a short form that asks for your contact details and makes you set up your login credentials. Alternatively, you can also sign up via your Facebook or Google account for easier sign-ins and to avoid having to remember your username and password.
The next step is for you to verify your identity by uploading a copy of your ID. Since eToro is a regulated platform, they have to complete the KYC (Know Your Customer) process before they allow you to trade. This verification process has two parts to it. The first part involves verifying your identity. For this, you can upload a copy of any government-issued ID, such as a passport, driving license, or visa. The next part is an address proof, for which you can either upload a bank statement or utility bill.
Once you have uploaded the documents, eToro has a quick response time, and will usually verify your account in a few hours.
The third step is to then deposit funds into your account. The minimum deposit on eToro is 200 GBP. This can be done in a variety of ways. For starters, you can add money to your eToro account via bank transfer or via credit/debit cards. They also accept a variety of e-wallets such as PayPal and Skrill. You can add funds in different currencies too, such as USD, GBP, and EUR. There are no fees or charges associated with depositing funds into your account, and they show up almost immediately.
The last step is then to begin trading Bitcoins. Simply head over to the search bar, search for Bitcoin or BTC, enter the amount you wish to buy or sell, and click on the order button.
This depends largely on the platform that you choose to purchase Bitcoin through, but in general for a platform like eToro, this can be as low as $25.
The process of selling Bitcoin with PayPal in the UK is relatively straightforward. You can simply sell your Bitcoin on the platform and then withdraw your funds to your PayPal account.
Yes, since PayPal is a highly regulated payments provider service and it allows only regulated cryptocurrency exchanges to use it as a method of payment, using PayPal to buy bitcoins is legal in the UK.
Yes, PayPal UK accepts Bitcoin on certain regulated platforms such as Paxful and eToro.
In order to buy Bitcoin with PayPal in the UK, all you need to do is to head over to a platform that supports PayPal, create an account, deposit funds, and then buy Bitcoins.
I'm a second year Accounting and Finance student at the University of Warwick, in addition to being an incoming Trading Analyst at Morgan Stanley. I'm passionate about the financial markets and all things finance.
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